Sector News

Amazon breaks into drug sales with Perrigo's store-brand OTC medications

February 22, 2018
Life sciences

While industry watchers were eagerly anticipating Amazon’s move into prescription drugs, the e-commerce behemoth snuck into over-the-counter sales with help from store brand expert Perrigo.

Amazon rolled out a line of consumer health products, called Basic Care, in August, CNBC reported. The portfolio—consisting of 60 Perrigo-made treatments—sets Amazon up to put the squeeze on retailers of OTC therapies, giving the Dublin drugmaker a boost in the process.

Basic Care doesn’t directly set Amazon up to begin selling prescription drugs, an Amazon spokeswoman told CNBC. But the company last month made its ambitions clearer with the announcement of a venture, in conjunction with JPMorgan and Berkshire Hathaway, to tamp down skyrocketing drug costs.

Amazon already sells branded OTC products on its site, including those from Perrigo’s GoodSense brand, the news service noted. But with Basic Care, Amazon can undercut its competition to reap just a hair in the profit margin column—something it’s got plenty of practice doing.

Of course, just because Amazon’s got the lowest prices doesn’t mean consumers will consistently order the Perrigo brands online instead of running out to a Walgreens or CVS when they need something. Recently departed Perrigo CEO John Hendrickson made that clear to investors last November when he downplayed the potential for a major disruption from a company like Amazon.

“When you want to cure a migraine headache or do something and you go to your pantry and it’s not there, you run to the store and get it. It’s sort of a ‘used as needed,’” he said.

But Perrigo, which is looking for a turnaround under new CEO Uwe Röhrhoff after quite the rocky stretch, will take all the sales it can get. The Dublin drugmaker is in the midst of a major restructuring—which it took on after a run-in with activist investors—and it’s also involved in an industrywide federal investigation into generic drug pricing.

By Carly Helfand

Source: Fierce Pharma

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